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Superfunds February 2016
‘teachable moment’ on a particular issue—and
education is an important part of this process.
If a member feels positive about the interaction
and knows what to do to achieve the
recommended outcome, then the member is
more likely to stay with the fund and seek further
advice at the various life-stages. At retirement,
the member is also more likely to turn to the
fund for advice and support they trust.
QUESTIONS OF CONFIDENCE,
TRUST AND COST
Competition from SMSFs for super funds’ high
value members appears to have plateaued
and may be gradually receding. Data from the
Australian Taxation Office (ATO) shows that the
net number of SMSFs established (that is, new
SMSFs less wind-ups of SMSFs) in the June 2014
financial year was 30,135. This was marginally
more than the net number in the preceding
financial year (29,883) but significantly lower than
that of the June 2012 financial year (33,762).
Given so many super funds lose members to
SMSFs and other super funds at retirement, it is
crucial to engage with these members in the
lead-up to retirement. Many members are
unaware that their super fund provides attractive
pension and retirement income offerings. The
provision of scaled advice by a fund can enable
members to leave their money where it is and
organise their cash-flow in retirement.
The absolute scale and brand strength of
Australia’s leading industry and retail super
funds means that they are clearly trusted by the
members (and employers) that use them. This
trust, and an open, educational approach, helps
mitigate common concerns that advice is ‘too
expensive’ or ‘not for me’. A company that has
the resources and proven capability to deliver
scaled financial advice will have the additional
advantage that it is very transparent in its fees
and remuneration methods. By partnering with
a scaled financial advice provider, who does not
manufacture or sell its own products, the fund
can guide members towards achieving the best
outcome with the super fund that they are in.
Ideally, a scaled financial advice provider will
charge purely on the basis of fee-for-service:
it will not receive commissions from
manufacturers or ad valorem fees that are a
particular percentage of the member’s balance.
There is little doubt that the leading super
funds in the near future will offer a greater
array of fully integrated advice solutions to their
members. By partnering with a specialist provider
of scaled advice solutions, these services can
be implemented quickly across many channels,
enabling members to engage more deeply with
the fund and receive the help and assistance that
they need at the moment they need it.
Ross Bowden is the chief executive officer at
Money Solutions.
Opportunities for super funds
Scaled advice offers funds a range of opportunities to enhance services to members, and
improve member retention:
• showing new members how to correctly set up their super to maximise their retirement
outcomes
• helping members put in place appropriate insurance cover
• helping members boost their super throughout their working life
• helping disability claimants to manage a disability payment
• helping members plan for retirement
• putting in place strategies such as ‘transition to retirement’
• helping members manage their cash flow in retirement.